HSA Rollover Rules: 60-Day Deadline, Limits, and Reporting

HSA rollover rules give you two ways to move money from one health savings account to another: a direct trustee-to-trustee transfer with no frequency limit and no tax reporting, or an indirect rollover where the custodian sends the money to you and you have 60 days to deposit it into a new HSA. You can only do one indirect rollover in any 12-month period. Miss the deadline or the limit and the entire amount becomes taxable income, plus a 20% additional tax if you’re under 65 and not disabled.

The direct transfer is almost always the safer choice. Your current custodian sends funds straight to the new custodian, you never touch the money, and the IRS places no cap on how often you can do it. The transferred amount doesn’t count against your annual contribution limit, and custodians aren’t required to report trustee-to-trustee HSA transfers on Form 1099-SA or on your Form 8889.¹ The trade-off is speed: with no federal rule requiring custodians to act within a set window, a direct transfer can take a few weeks to a few months. The rest of the rules below apply to indirect rollovers, which is where things get tight.

The 60-Day Deadline

You have exactly 60 days from the date you receive an HSA distribution to deposit it into another HSA. The clock starts the day the check or electronic payment arrives, not the day your old custodian mails it.² If a check is mailed March 1 and lands March 5, your window runs from March 5.

Miss it and the whole distribution becomes gross income for that year. On top of ordinary income tax, the IRS adds a 20% additional tax unless you’ve reached age 65, you’re disabled, or the distribution follows the account holder’s death.³ On a $10,000 distribution, that’s a $2,000 penalty before income taxes even enter the calculation.

The IRS does not grant extensions or hardship waivers for missed HSA rollover deadlines the way it sometimes does for retirement accounts. Sixty days means sixty days. Deposit the check the moment it arrives. Most custodians accept mobile deposits through their apps, which removes mailing time on the receiving end.

The Once-Per-12-Months Limit

You can complete only one indirect HSA rollover in any 12-month period. The statute uses a lookback: if you received any other HSA rollover distribution during the year ending on the date of your new distribution, the new one doesn’t qualify.² You need at least 12 full months between one rollover distribution and the next.

Attempt a second rollover inside that window and it fails. The funds get taxed as income, and the 20% additional tax applies if you’re under 65 and not disabled. Direct transfers have no such cap, so if you need to move HSA money more than once a year, that’s the route.⁴

Partial Rollovers Still Count

You don’t have to move your whole balance. The IRS allows you to request any dollar amount, deposit it in a new HSA within 60 days, and leave the rest with your old custodian. Both accounts stay open.⁴

The catch: a partial rollover still uses up your one indirect rollover for the 12-month period. Move $2,000 out of a $15,000 balance and you’ve spent your annual rollover regardless of the amount. To move funds in stages, use direct transfers instead.

HDHP Coverage Is Not Required to Roll Over

You do not need to be enrolled in a high-deductible health plan to move HSA money. That requirement applies to making new contributions, not to rollovers or transfers. You can roll funds between HSAs even if you’ve switched to a traditional health plan, enrolled in Medicare, or have no coverage at all.⁴

This matters most after Medicare enrollment. Medicare sets your HSA contribution limit to zero, but it doesn’t freeze the balance already in the account. You can still spend it on qualified medical expenses and still move it to a different custodian. The 60-day deadline and the once-per-year rule apply the same way.

How to Execute an Indirect Rollover

Request a distribution from your current HSA custodian, usually through a distribution form in their online portal. Specify the amount and indicate that the funds should be sent to you, not directly to another custodian. Most custodians issue a check made payable to you.

When you deposit the check at the new HSA, make sure the custodian records it as a rollover contribution rather than a regular contribution. Rollovers do not count against your annual contribution limit, so the coding matters.⁴ If it’s miscoded and pushes you over the annual limit ($4,400 for self-only coverage or $8,750 for family coverage in 2026), a 6% excise tax applies to the excess for every year it stays uncorrected.⁵

New custodians typically require a rollover contribution form or a deposit slip that identifies the money as a rollover. Mobile app deposits usually have a contribution type selector; choose the rollover option. If mailing the check, include the completed rollover form and consider certified mail so you have proof the deposit was received inside the 60-day window.

Transfer and Exit Fees

Many HSA custodians charge an account closure or outgoing transfer fee, typically $20 to $25, though some charge nothing. The fee is usually pulled from your HSA balance before the funds leave, so the amount arriving at the new custodian is slightly less than what you had. Check your custodian’s fee schedule before starting the move.

If a fee is deducted from an indirect rollover distribution, the full pre-fee amount is still what you received for tax purposes. To roll the original amount, you’d need to make up the difference from your own pocket. The dollars involved are usually small, but the rule is worth knowing.

Reporting the Rollover on Your Return

A properly completed rollover is tax-free but still has to be reported. Use Form 8889 for the year the rollover occurred. Enter the total distribution from all HSAs on Line 14a, then the rollover amount on Line 14b. The form subtracts 14b from 14a, so only the non-rollover portion (if any) flows through as potentially taxable.⁶

Two forms help you complete this. Your old custodian sends Form 1099-SA documenting the distribution, usually by early February. Your new custodian files Form 5498-SA with the IRS showing the rollover contribution, with Box 4 capturing the rollover amount specifically.¹ Custodians have until May 31 to file the 5498-SA, so it may arrive after you’ve already filed. Reconcile it against your own records once it lands. If the 1099-SA distribution and the 5498-SA rollover contribution don’t match, contact the custodian right away. A mismatch can trigger IRS questions or cause the rollover to be treated as taxable.

Fixing a Mistaken Distribution

If you took an HSA distribution by mistake, meaning it wasn’t meant as a rollover or a payment for medical expenses, you may be able to return the money when the error was due to reasonable cause. The deadline to return the funds is April 15 of the year after you first knew or should have known the distribution was a mistake.⁷

The custodian treats the redeposit as a correction, not a new contribution, so it doesn’t eat into your annual limit. If a 1099-SA was already filed reporting the distribution, the custodian issues a corrected form once the return is processed. Keep documentation of why the distribution was a mistake; the IRS standard here is clear and convincing evidence of a good-faith error.

1
Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA
2
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
3
Office of the Law Revision Counsel. 26 US Code 223 – Health Savings Accounts
4
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
5
Internal Revenue Service. Revenue Procedure 2025-19
6
Internal Revenue Service. Instructions for Form 8889
7
Internal Revenue Service. Distributions for Qualified Medical Expenses